August shows positive real estate trends in Finland, says Central Association CEO
August appears to be the best month for real estate transactions this year, according to Tuomas Viljamaa, CEO of the Central Association of Finnish Real Estate Agents. Official sales figures for August will be released soon, with a few data sources still pending.
Real estate transactions have shown a steady upward trend throughout the year, except for a dip in June. This decline may be attributed to the heatwaves or the European Central Bank’s interest rate cuts, which provided a boost to July’s sales. Overall, the trend remains positive.
Last month, transaction volumes continued to grow, and September has started strong as well. July and August were also better in terms of sales compared to the same period last year. Viljamaa estimates that transaction volumes in August increased by 5-10% compared to the same month last year.
Small apartments are attracting interest, while new constructions lag behind in sales. Viljamaa notes a general market recovery, with even small apartments seeing more activity in July. However, sales of new developments remain sluggish. He observes that confidence in the future seems to have strengthened.
In the single-family home segment, some properties that had been on the market for a long time started to sell in July and August, albeit at lower prices. Viljamaa sees this as a clear sign of market improvement.
He criticizes the notion that the market only improves when prices rise sharply, suggesting that rapid price increases indicate a lack of available housing.
Interest rates play a crucial role; Juho Keskinen, chief economist at mortgage provider Hypon, states that the swift decline in rates has positively influenced consumer sentiment and stimulated transactions. The 12-month Euribor has dropped below 3%. Following the European Central Bank’s rate cut in June, consumer intent to purchase homes has noticeably strengthened, and another rate cut is anticipated from the ECB’s meeting tomorrow. Keskinen believes that consumers are closely monitoring employment conditions before making significant home-buying decisions.